December 7, 2010, 3:17 PM

4G wireless is finally here, but its impact won’t be felt anytime soon, report says

Yankee Group Research says 2011 will be a year of preparation, not penetration.

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The television has been abuzz of late with commercials by wireless carriers touting their new 4G networks. These fourth generation wireless networks enable consumers to access the Internet from their smartphones at faster speeds than today’s much more common 3G networks.

4G could be a boon for retailers in mobile commerce as it will help download sites faster and could drive more consumers to the mobile web. But how important is it today?

Not very, according to a new report from Yankee Group Research Inc. It’s still far too early in the rollout of 4G networks, and 2011 will mark a year of preparation, not penetration, for telecommunications companies, the research firm says.

“Once 4G takes hold, its impact will be swift and profound, and 2011 is the year to prepare,” says Jason Armitage, senior analyst and a co-author of the report. He predicts a slow start for 4G but says moves made by telecommunications players in 2011 will determine their ultimate fate in the marketplace.

The report predicts for 2011 that:

  • 4G users will spend twice as much time on the mobile web as their non-4G counterparts. Companies that invest in mobile web sites and rich media content will benefit most. Greater use of the mobile web and the ability to present richer experiences can help retailers in mobile commerce.
  • By the end of 2011, the world’s most important 4G technology, a standard known as Long-Term Evolution, or LTE, will account for only 0.04% of all mobile lines.
  • 4G will fail to win big corporations—currently, less than a third of corporate decision makers believe 4G is important, and that number won’t budge by year’s end. This could slow adoption of 4G if corporations don’t buy 4G phones and data plans en masse for their employees, which they did with BlackBerrys when the mobile devices first launched.
  • A denial-of-service attack will take a 4G network down. In their rush to roll out 4G, wireless carriers are cutting corners on security; one unlucky operator will pay the price.
  • Mobile video will not drive consumers to 4G. Mobile video won’t be the killer 4G app everyone expects; instead, consumers will spend more time with music services like Pandora and Slacker.
  • 4G will herald tiered mobile data pricing models and flat-rate pricing will be gone forever.
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